Monday, November 24, 2014

The SBA and supplicatory

Commercial real
estate prices continued to surge in the third
quarter.

According to
CoStar, commercial property sales activity surged 23% over the last year.

Both industrial
properties and hotels experienced healthy gains.

This month's
CoStar Commercial Repeat Sale Indices (CCRSI) provide the market's first look at
September 2014 commercial real estate pricing. Based on 1,214 repeat sales in
September 2014 and more than 125,000 repeat sales since 1996, the CCRSI offers
the broadest measure of commercial real estate repeat sales activity.

If you would like
a copy of this release from CoStar, send a supplicatory
email.

The debenture rate
is only 2.80% but note rate is 2.84% and the effective yield is
4.879%.

________________________________________________AHEAD
OF THE YIELD CURVE

Minutes of the
Federal Reserve’s last meeting on monetary policy on October 28th and
29th said that they should be on the lookout for signs of a decline
in expectations for inflation.

Over the last 12
months, the Consumer Price Index increased 1.7 percent according to the Bureau
of Labor Statistics and has remained below the Fed’s 2 percent target for 29
consecutive months

One of the Fed’s
favorite gauges of the economy is the capacity utilization rate which measures
how much plants and factories are being used. The Federal Reserve watches
capacity utilization rates to see if production constraints are threatening to
cause inflationary pressures. Bottlenecks or shortages often lead to
inflationary pressures that would drive prices even higher. Several analysts
have pointed to a rate between 81% and 82% as a tipping point over which
inflation is spurred. The Federal Reserve typically won’t initiate increases in
interest rates until
then.

Here is what
capacity utilization rates have
done:

1997-
83.6

1998-
83.0

1999-
82.4

2000-
82.6

2001-
77.4

2002-
75.6

2003-
74.6

2004-
79.2

2005-
80.7

2006-
82.4

2007-
81.5

2008-
79.9

2009-
66.9

2010-
74.8

2011-
76.7

2012-
79.0

2013-
77.8

2014-
78.8

Capacity
utilization for the industrial sector decreased 0.3 percentage point in October
to 78.9 percent, a rate that is 1.2 percentage points below its long-run
(1972–2013) average. Capacity utilization at 78.9% is 1.2 percentage points
below its average from 1972 to 2012 and below the pre-recession level of 80.8%
in December 2007.

What does all this
mean?

I don’t
know.

Also reflected in
the Fed minutes was the concern that inflation might persist below the
Committee's objective for quite some time.

It would appear
that interest rates will not be going up anytime
soon.

__________________________________________OFF
BASE

While
inflation may not be appearing on the Federal Reserve’s radar, it is hitting
home.

Americans
will be paying the second-highest costs on record for their Thanksgiving
dinners.

Blame
the sweet-potato casserole. Higher prices for sweet potatoes, whipping cream,
and pumpkin-pie mix are driving the gains. A feast for 10 will come in at $49.41
this year, a modest 37-cent increase from 2013, while just shy of the all-time
high of $49.48 set in 2012, according to a price survey by the American Farm
Bureau Federation that was started in 1986. Prices for a 3-pound (1.4 kilogram)
bag of sweet potatoes rose 6 percent to $3.56, and the cost of a half pint of
whipping cream climbed 8.1 percent to $2. A 16-pound turkey will cost shoppers
$21.65 this year, down from $21.76 in 2013. Turkey prices fell because retailers offered
discounts to lure customers, even though U.S.
grocers are paying the highest prices ever at the wholesale level.

Americans
eat about 46 million of the birds on Thanksgiving.

The
average weight of a turkey purchased at Thanksgiving is 15 pounds. How many
persons can a 15 pound turkey feed? Allow 1 pound of uncooked turkey per
person. So to answer your question - 15 people without leftovers.

So
if 46 million turkeys are served and 15 people can eat a single turkey that is
675 million people that can be fed. That’s more than twice the population of
the United
States.

One
in seven Americans – 46 million people – rely on food pantries and meal service
programs to feed themselves and their families, according to a study by Feeding
America, a network of 200 food banks

46
million turkeys will be eaten on Thanksgiving Day. 46 million people in
American are going hungry every day. Have a Happy
Thanksgiving.